Essential Levels of Services as the Unifying Architecture of the Regional State Reform

Abstract

This article argues that the implementation of fiscal federalism (Article 119 of the Constitution), the definition of the essential levels of services (Article 117, paragraph 2, letter m) and asymmetric regionalism (Article 116, paragraph 3) are not separate undertakings, but components of a single reform of the regional State, intertwined with the tax reform of Law no. 111 of 2023 and with the milestones of the National Recovery and Resilience Plan. Following Constitutional Court judgment no. 192 of 2024, which framed the determination of essential levels as a delegation by function rather than by subject matter, the focus shifts from the allocation of competences to the translation of essential levels into standard costs and needs, and to their linkage with equalisation. From this reconstruction the article derives a sequencing argument: stabilising the procedure for determining essential levels and quantifying standard needs should precede the revision of equalisation mechanisms and the reform of subnational taxation, and both should precede any general transfer of further functions to the Regions. Through the analysis of Law no. 199 of 2025 and of the individual sectors, ordered along a gradient of maturity, the article shows that, once the resource gap is closed, the residual gaps in services will tend to reflect administrative capacity rather than financial endowment.